Optical Switches in the Next-Gen Transport Network - Technology Information

Telecommunications, June, 2000 by Andrew Ware, Jonathon Lacey

A single big fabric or multiple smaller fabrics: Which makes more sense for the new all-optical network?

The Internet traffic explosion has placed enormous capacity demands on service providers, challenged to supply the necessary capacity and flexibility while generating cash and properly managing assets to meet shareholder demands. In the optical networking domain, dense wavelength division multiplexing (DWDM) has met the joint engineering/financial challenge by cost effectively increasing the capacity of fiber assets. Still, bottlenecks exist at optical-electrical-optical (OEO) switching points for high-bit-rate, high-channel-court systems. In addition, high-speed, long-haul transmitter and receiver costs remain high. Many innovative all-optical technologies have been proposed to eliminate these switching bottlenecks. However, little attention has been paid to how these technologies affect what matters most to investors--return on assets, cost of ownership and customer churn--if reliability is poor and provisioning takes too long. In the long run, small, scalable, reliable all-optical switches may be the right choice to meet the engineering, reliability and financial requirements of the new optical network.

Some aggressive market research reports have projected exponential increases in budgets for optical switching equipment, but reality is far different. Capital budgets are not increasing exponentially. Past spending indicates that perhaps 20 percent of these capital budgets would be spent on optical switching equipment. The future for those budgets is more disquieting. Services such as voice are being priced down to zero margin, and profitable business customers are being lured away by new competitors. The future top-line revenue stream will have difficulty supporting massive increases in capital spending.

Core Optical Cross-Connects

Optical cross-connects (OXCs) will be used to route wavelengths between inputs and outputs while adding and dropping local traffic. Many carriers expect to need nodes with several thousand input and output wavelengths within a few years. Consider 25 fibers times 160 wavelengths per fiber implies a 4000x4000 OXC. The question is, how should these nodes be architected?

From an engineer's standpoint, the most flexible architecture is the opaque; wavelength interchange cross-connect (WIXC) shown in Figure 1. In the WIXC, all wavelengths are received and retransmitted at the cross-connect by transponders at each port. In this architecture, any wavelength can be switched to any other wavelength on any fiber through transponder wavelength conversion.

However, the long-haul transmitter and receiver costs at these nodes for 10-Gbps, and 40-Gbps data rates may be considerable. According to market researchers such as RHK, the year-2000 price for a 10-Gbps (OC-192) long-haul transmitter/receiver pair is approximately $5000. In a 4000x4000 node, 4000 ports at $5000 means $20 million in component-level transmitter/receiver costs alone. In the network equipment manufacturer value chain, the final price of a network element to the service provider contains other electronic control components, manufacturing and optical component costs, as well as the profit margin. The final price can be estimated at five times the optical component cost. Therefore the service provider's price for this unprotected node would be $100 million, excluding the optical switch fabric, intra-office transceivers, amplifiers, mux/dmux and other components. For the largest service providers, which may need 100 very large nodes, this adds up to $10 billion.

A similar calculation using 40-Gbps transmitter/receiver costs results in costs about 2.2 times higher. These costs stretch the total capital expenditure for switching and transmission budgets and do not consider hundreds of optical add/drop multiplexers (OADMs), smaller regional cross-connects, services and future upgrades.

Of course, all these nodes would not be purchased in a single year, and cost, Markup and cross-connect port count models may vary slightly. However, even with the most optimistic numbers, the conclusion remains that long-haul service providers cannot afford to construct WIXCs with all those transponders around every port in all the large nodes in their networks.

Single Big Fabric or multiple Smaller Fabrics?

Ultralong-haul transmission systems will enable unregenerated transmission over very long distances, and thus the possibility of transparent cross-connects that eliminate expensive OEO conversions. Eliminating transponders does away with wavelength conversion. There have been advances in all-optical wavelength converters, but even if these devices materialize, they will still be expensive. Network management, especially wavelength assignment and restoration, in a mesh network or subnetwork is challenging, but these challenges are reduced in highly connected networks with many wave-lengths. The previous financial analysis shows that there are significant incentives to overcoming the remaining challenges.